The US Government's Single Largest Asset Is STUDENT LOANS

The largest asset on Uncle Sam's balance sheet is not U.S.
Official Reserve Assets, nor Total Mortgages, nor Taxes
Receivable.

The correct answer, as of the latest Flow of Funds report for Q1
2012, is ... Student Loans.

The rapid growth in student debt has been a frequent topic in the
financial press.

One stunning chart that caught my attention illustrated the rapid
growth in federal loans to students since the onset of the great
recession.

Here is a chart based on data from the Flow of Funds Table L.105,
which shows the Federal Government's assets and liabilities.

As I point out on the chart, the two callouts are for Q4 2007,
the quarter in which the Great Recession began (December 2007)
the most recent quarter on record, Q1 2012. The loan balance has
risen and astonishing 332% over that timeframe, most of which
dates from after the recession.

This chart only includes federal loans to students. Private loans
make up an even larger amount. Earlier this year the Consumer
Financial Protection Bureau (CFPB) posted an article with the
attention-grabbing title: Too Big to Fail: Student debt hits a
trillion. The details of the private student loan market are
not readily available, but CFPB plans to publish its study
results on the topic this summer.

But back to our quiz. Student loans may be a liability on the
consumer balance sheet, but they constitute an asset for Uncle
Sam. Just how big? Nearly 35% of the total federal assets, over
four times the 8.6% percent for the total mortgages outstanding.

Of course, assets are, sadly, the trivial side of Uncle Sam's
Flow of Funds balance sheet -- about 1.36 Trillion. The liability
side totaled 12.65 Trillion at the end of Q1 (details here).